Co-Owned Businesses – Giving Employees A Stake In The Company

The Link Between Morale and Productivity

In any workplace, there’s a proven link between employee morale and productivity. When morale is low, you lose more work hours, face higher safety risks, and see increased waste. You also lose access to one of the most valuable resources in a business, cost-saving ideas from motivated, engaged employees.

It’s one thing to acknowledge the value of employee engagement. The real challenge is how to create it. Increasingly, the answer is employee ownership.

Why Employee Ownership Works

Employee-owned businesses (EOBs) give workers a tangible stake in the success of the company. When employees are also owners, they start thinking more like stakeholders, focused on quality, sustainability, and long-term goals—not just short-term pay.

Independent research from the US, UK and Europe consistently shows that EOBs tend to be more resilient, competitive, and successful. They also rank higher on employee satisfaction and corporate longevity. As the model gains traction, many governments are introducing tax and legal incentives to make transitioning to employee ownership even more appealing.

From Worker to Stakeholder

When employees have ownership, they are no longer passive participants. They become proactive problem-solvers who want the business to thrive. This change in attitude pays dividends.

Take Gripple, a UK manufacturing firm. When its biggest US customer stopped ordering, employees and management together agreed to take temporary salary cuts to keep the business afloat. Hugh Facey, Chairman of Gripple, said it best:

“Because we are all shareowners everyone could see what was happening and why such action was necessary. It worked like glue, pulling everyone together.”

Building a True Ownership Culture

Employee ownership alone isn’t enough. You need to build an ownership culture—one where staff understand their stake and see how their day-to-day performance impacts the company’s value.

This is easier to achieve in smaller firms. As businesses grow, employees can feel disconnected from strategic and financial matters. But forward-thinking EOBs find creative ways to keep everyone engaged.For example, Van Meter Industrial Inc., a US distributor with over 300 employees across multiple sites, launched an internal campaign:

“Work 10, get five free.”The message? An employee earning $30,000 a year could build up $150,000 in company stock over 10 years—thanks to growth and company contributions.

A Smarter Succession Option

For owners of private companies, transitioning to employee ownership offers more than just a culture shift, it provides a practical succession solution.

Selling your business to your own management and employees can often yield a better result than selling to a third party. It enables you to:

• Extract capital on fair terms

• Take advantage of tax concessions for employee share schemes

• Preserve your business’s values and legacy

• Keep jobs and operations in the local economy

As one CEO said after transitioning to an EOB:

“I get to go home at 5 o’clock now. It used to be that if the fellows encountered any problems at all, they’d stop working and wait for me to fix it. Now, they handle things themselves. They own the outcome.”

Thinking About Employee Ownership?

If you’re considering succession planning or looking to boost productivity and staff engagement, employee ownership may be a solution worth exploring. But the process requires planning, legal structuring, and financial expertise.

At Dolman Bateman, we help business owners assess whether the EOB model suits their goals. We assist with:

• Share plan design and implementation

• Business valuations

• Structuring for tax effectiveness

• Employee education and engagement strategies

Contact us today to find out how you can future-proof your business and empower your team through employee ownership.

Meeting with Gavin Bateman

30

Book Now

Disclaimer:

The information provided in this article is general in nature and does not constitute personal financial, legal or tax advice. While every effort has been made to ensure the accuracy of this content at the time of publication, tax laws and regulations may change, and individual circumstances vary. Dolman Bateman accepts no responsibility or liability for any loss or damage incurred as a result of acting on or relying upon any of the information contained herein. You should seek professional advice tailored to your specific situation before making any financial or tax decision.